Congress Repeals 1099 Requirement

Physicians' offices will not have to file a 1099 form with the Internal Revenue Service when they spend more than $600 a year with another business if President Obama signs legislation repealing the requirement, part of last year's health system reform bill to offset the cost of expanded insurance coverage.

On April 5, the Senate joined the House of Representatives in passing the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 by a vote of 87-12.  

But a White House statement after the Senate vote did not say if the president will sign the bill, nor did it threaten a veto. "As the president said during the State of the Union, we are open to working with Republicans and Democrats to improve the health reform law and we are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses," the statement said. "Small businesses are the engine of our economy and eliminating the 1099 reporting requirement is the right thing to do. As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families. And the Administration remains eager to work with anyone with ideas about how we can make health care better or more affordable for all Americans." 

According to AMNews, President Obama previously said he does not support the bill's method of paying for the repeal. Under the approved language, AMNews said, certain recipients of health insurance assistance under the health reform law would need to repay those subsidies if their incomes were to increase above a certain threshold later in the year.

The American Medical Association urged President Obama to sign the legislation because the 1099 requirement is an unnecessary burden on physicians' practices and other small businesses. "Existing administrative burdens already weigh heavily on physicians, taking up time that is better spent caring for patients," said Jim Rohack, MD, AMA's immediate past president.


Action, April 15, 2011


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